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Passed APM on 5th attempt. After 20 years since first registration, counting 7 years break. My first registration with ACCA was in 2000.
Thanks to COVID my SBR exam did not expire in June. Otherwise I would already have given up. Thanks to introduction of CBE examination I was able to generate enough text to pass. With my handwriting I would never pass APM. I was very lucky this time!Fail. To me this is not advance performance management anymore. This is a handwriting skills exam.
Q1.
Waste management services WMS, not for profit
a/ Advise how to cascade from mission to KPIs
b/ Evaluate existing performance metrics
c/ Evaluate performance and bench marking with A,B,C from other countries
d/ Evaluate use of ZBB for Air Pollution project and compare it to incremental budgeting used currentlyScenario was a little confusing and I did manage to write everything I wanted, time management was tough…
Q2.
Company designing, producing, selling womens shoes
a/ Benefits of database system – currently they have one person preparing spreadsheet with data about sales, prices, competititors. There were plenty of benefits to describe from capturing, processing to presenting data, speed, quality, …. many easy marks.
b/ Problems with performance management in joint venture with company producing childrens shoes – companies seemed to have different stragegies – differentiator and cost leader. Very similar to question APM 6/14, part c, some easy marks.Question 4.
One division purchaisng tomatos and producing pulp. Another division selling canned product from pulp.
a/ Propose improvements in trasfer pricing between divisions. They currently use full cost + 15%. Very theoretical question, no calculations required. Basically easy marks, but only if you knew theory very well.
b/ Compare current profit-related remuneration scheme with proposal to give share options to managers – many easy marks to spot in scenario.Q1 Financial perspective – I also commented on ROCE being better at measuring overall objective. For GPM I suggested it should not be in internal business perspective but financial perspective, as a measure for sales department only. Customer perspective – I commented that market share and brand awarness were good measures, showing how exactly they link to overall objective of the company (market share – sales, brand awareness – higher prices). In next requirement on innovation and learning, you were supposed to calculate measures in Appendix 2 and assess actual performance. For new product lines, they seemed to underperform, introducing only 2 lines in past 4 years. But info about competitors performance on new product lines was missing to confirm that. As for time to market, it was stated that new product line Solar TV was expected to be implemented in 3 years. That seemed to be too long. But again, competitor benchmarks were not presented.
I think requirement b) was asking about practical steps to implement BSC. I suggested steps like implementing new IT system, training employees.
Q2 – Part a – I commented on barriers of entry as CSFs and linked them to KPIs. E.g. prices of land and buildings, market share, operational gearing.
Part b – I commented on tunnel vision, because managers were only evaluated by profit margin. Improvements suggested like generating management reports and rewarding performance on other measures.
Part c – risks of loyalty system were high purchase cost 4m vs 2.4m annual profit, extra cost on system for interpreting data, employee related costs, sales from restaurants not recorded (risk of fraud)
Q3 – I commented TRH overperformed on economy because they did not exceed salary bedget. As for efficiency I started to calculate salary per patient and ran out of time…Anyone else found scenario for Q2 messy? From reading question requirements, I was confident about what examiner is asking. But in order to relate requirements to scenario, i spent too much time analysing it. Any tips how this could be avoided? Or was I just tired after Q1?
Good luck everybody! It is 1am here but no chance to sleep. Could be my last exam. After so many years. First time registered in 2000.
Q1, although the debt restructuring seemed complicated, was very much like prior questions asked. Discussion about RTO was easy marks, if you read past article. BUT currency swap? Well I read the article twice… But I doubt it will earn more then 5 out of 20 marks on currency swap. The style of question was like for the people who already do currency swaps in real life. I did not see any past exam question on that. And article was just a bit of a theory….
Q4 – both base case NPV and APV were negative in my answer. This was a familiar question, so I hope for a marginal pass. Calculating all past exam questions seemed NOT to be enough preparation this time… And that is unfair.21.000 m USD is Value of equity using current share price.
In this question, Cigno Co makes its own valuation of equity, by calculating total Value of company and then deducting Value of debt.Total market value of Anatra estimated by Cigno Co. is 37.478m.
Value of equity = Value of company – Value of debt.
Value of equity estimated by Cigno Co. = 37.478 – 9.000 = 28.478m
Amount that Cingo Co. has to pay to current shareholders = 28.350m (that includes also 35% premium)
So net gain from transaction = 28.478-28.350 = 128m.
